Moral underpinnings of Capitalism

1. Moral underpinnings of Capitalism Created by: Aleksandar Apostolov

2. Capitalist systems and market economies are based on the idea for perfect resource allocation on the market. But, considering the non-existence of perfect competition and the market failures this systems, though still implemented, ignites serious lack of morality and ignites urgent need for social responsibility. Why? Because, the system that promotes sale and pricing for everything that can come to your mind, monetizing ideals and commercializing faith creates slow but certain social decadence caused by the disbalance that the demand and supply mechanism creates. In that mechanism of glorified trade relations, followed by fast technological development and values loss it seems that the elementary picture for humanity and world of men is starting to fade. Even modern economic models can’t explain the functioning of today’s national economies. The basic principals of every society are forced to be forgotten with the simple justification in progress. The lack of corporative and financial discipline in the free market brings confusion which creates panic, anger, fear and deviations. Simply, all the problems good hardworking people have, originate in some CEO’s profit interests. That can not be left to Smith’s invisible hand. The market economies must be regulated and moral and ethical responsibility must be established.

3. Ethical foundations of Capitalism The liberal’s point of view clearly underlines that Capitalism is not a society of equality. It is represented as an economic system founded on the market allocation of resources and driven by the strong individualism, strive for success, innovation and profit. The interference of the state should be as minimal as possible providing a low and efficient private sector that will only help the market equilibrium and maintain sustainable growth. In this system, that gives the most important role t corporations and business people(economic subjects) can create more income and live a wealthy and prosperous life following the basic principles: • Companies work for profit, acting in accordance with the interest of their stakeholders, creating goods that satisfy the need of their customers, so the only motive for work should be higher profit • Nothing is free. If you are good at something never do it for free . Everything can be expressed in currency unit and evaluated in shares.

4. The power comes with defeating the competition, but the profit can come with cooperation between competitors. • Customer needs are most important and keeping good quality and low pricing is essential for great market share. But who says you can’t create customer need? These principals that are embedded in every decision in the economy create commercialized society where everything(including love, faith, ideals) can be valued, priced and bought and promote innovation that facilitate human’s life to the point of decadent laziness and stupidity in young generations. Shouldn’t we be afraid for the moral values of the Internet generation of kids who grew up watching violent and pervert movies, socializing on Twitter and falling in love on Facebook? And all that is a normal incorporated part of our daily life thanks to the strong marketing mix of companies which produce deviated goods and services. Consumption of their product is considered normal, only because it generates income for them, providing them the possibility to control.

5. That materialistic system based on profit, market share and corporative control which promotes state intervention and regulation as breaking the basic freedom of choice, causes the most problems in the known overpopulated world. They begin on a micro level with an intensive marketing and commercialization in order to make fortune or not releasing innovation unless it can penetrate the market. They evolve and continue as tax evasion, corruption, exploitation of workforce and resources. At the end we get the recipe for the society that we know today. Society with great class differences, antagonism and international community of political problems, wealth concentration and great division between developed and undeveloped countries. In addition production of human resources and staff in accordance with the companies needs is required. And the crown jewel of that system are climate changes and pollution.

6. Socialism • “To have what you need”-is the motto of the antonym to free market capitalism typical for the US. Socialist systems originated from Russia are based on social equality(equal human and social rights, equal possibilities for education, work, social justice, providing workplaces for every citizen, equal income, progressive tax system), planned economics system where the decision what who and how to produce is planned by the state, tolerance and moral discipline. • This postulates create moredisciplined and aware population which in the economic and social decisions is strongly controlled by the state. But, the main problem is the lack of motivation and innovation which comes with equal incomes and social equality and values that can represent the interests of a small political elite, creating repression for others

7. Welfare state • The Keynesian model accepted of many European communities is set on the demand to create a public and transparent society which, opposite of the US free market society is based on developed and efficient public sector which helps the state to take care for the welfare of its citizens. The welfare state system is based on extensive public education, generous system of social security and health protection. The benefits brought to people on this way create collective awareness for other’s people problems and ignite peaceful cooperation, tolerance and prosper in the society. However, the extensive and increased public expenditure for social benefits can sometimes forget the economic factors. So the welfare state can crowd out the private sector, stop the innovations and market growth and increase the public debts which will lead only to budget cutting that will brings bigger problems(corruption, unemployment, increased criminal rate, suicides)

8. The turmoil of the latest depression and the newest political escalations in this world strongly emphasizes the need for moral and ethical evaluation of the free market economy. It is expected that the market failures and wealth concentration, as well as the influence of transnational corporations gives a small group of entities the right to manage an entire habitats (including the planet) in light of their interests. If that continues, moral decay, lack of fiscal and moral discipline, class division and antagonism corruption and climate change will only intensify. The market mechanism( which is utterly under great control of corporations) will produce a hopeless, materialistic new generations born in the era of digitalized lives and smart gadgets. And the great inequalities in that society can bring to massive conflicts even with the positive feedback of globalization process. So the free market economy can not justify this acts simply with the basic principals of the market, not in the situation when that escalate into destruction of the same capitalist systems. So, when the needs of the many outcome the needs of the few, moral and ethical evaluation of Capitalism must be made and social and ethical responsibility and accountability must be required

9. In that light an ideal value-based capitalism should be a combination of welfare state and socially responsible enterprises. To provide the further progress and facilitate human problems, companies and governments must invest in socially useful and ecological projects for the next generations( commercialization of solar energy in the underdeveloped countries, producing artificial raw materials, oil replacement fuels). • In order to provide social equality the energy and Internet access should be free for every citizen. • The national regulatory regimes in a society of value-based market should limit the profit or personal income( and every cent above that sum should be invested in building common ecological and modern capacities or advanced public and scientific research and development), limit the possession and trade of shares to prevent the speculative games that can annihilate good entities. • National audit office should be formed • The system will require public debates to determine which socially sensitive items and goods that cannot be marketed and subject of trade and taxation.

10. A system of national ecological standards, ecological taxes and subsidiaries for awareness should be establish • Competition control and antimonopoly legislative should be emphasized with bigger sanctions. • That society based on moral values should rest on equal possibilities for employment, equal and extensive social benefits for the unemployed and support for the employers. • Maintaining progressive taxation which will make the rich to contribute to public expense more than in proportion to their revenue. • Only with these methods for bigger control of the economic acting, promotion of the collective awareness and social responsibility and an adequate social benefits will incorporate the ethical thinking in the process of decision making and will reduce the aches of the market. In that way, humanity can devote itself to progress without consequences.